Jeremy Corbyn

[Premier Quality]

Because every time the economy was mentioned they ran away and hid instead of attempting to defend their actions.

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Damn, I was rooting for 'the evil brainwashing right wing press'

 

[visage]

I leave hyperbole to you.

 

[Papper]

Debt levels dont really matter, within reason. UK debt leves were historically low before, during and after the 2008 crash.

If there was concern about UK debt levels as a result of Brown's spending, why was the market perfectly willing to allow the UK government, almost overnight, to issue 500 billion quid of debt with barely a flicker in the long term gilt rate?

Could you perhaps tell us what tangible things you're referrng to when you say it 'clearly affected' our ability to respond? Had Brown been more frugal how would our response have been different?

In any government if you are spending more than what you raise - then you borrow to meet the shortfall, those that lend are eventually going to turn around and say ' No More' . If you are spending insane amounts of money to even service the interest, you have problems whether local or national level. To an extent it's all a game where money is created out of nothing and numbers spin around because they don't actually base anything on value any more. Monopolies and cartels rule the roost.. and Economists will argue until the cows come home.

Either reduce spending or raise revenues but when inequality levels are at ridiculous levels you should really look at redistributing the wealth from the 1% to the 99% but I don't think any of them are able to do that.

 

[Templeton Peck]

In any government if you are spending more than what you raise - then you borrow to meet the shortfall, those that lend are eventually going to turn around and say ' No More' . If you are spending insane amounts of money to even service the interest, you have problems whether local or national level. To an extent it's all a game where money is created out of nothing and numbers spin around because they don't actually base anything on value any more. Monopolies and cartels rule the roost.. and Economists will argue until the cows come home.

Either reduce spending or raise revenues but when inequality levels are at ridiculous levels you should really look at redistributing the wealth from the 1% to the 99% but I don't think any of them are able to do that.

Most govts spend more than they raise. The trouble is with a surplus is that when a govt does that it is literally taking money out of the economy and doing nothing with it. If we run a £5bn surplus then the private sector will have to fill that hole either via businesses or consumers. If there ever is a case for running a surplus (maybe pay off a little of the national debt) then you do it when things are going great not when we're in the shit.

Debts are a real problem for private individuals and companies - for a govt that can literally create it's own money, not so much. Gideon's quantitative easing (or 'printing money' when Corbyn suggests it) saw the BoE buy a huge chunk of our national debt so it's to them that we owe most of it. Given they're directly answerable to the Treasury I don't lose any sleep about them calling it in.

 

[Premier Quality]

Absolutely - and that's one of the things Gordon should have done when we were in a massive boom, rather than add to the debt we already had. As well as keeping spending to sensible levels obviously.

 

[Lord Knows]

Absolutely - and that's one of the things Gordon should have done when we were in a massive boom, rather than add to the debt we already had. As well as keeping spending to sensible levels obviously.

Are you saying the Labour party should not have spent billions more on the NHS than the Conservatives?
Just look at the state of it now 6 years on.

 

[Deutsch Wolf]

Absolutely - and that's one of the things Gordon should have done when we were in a massive boom, rather than add to the debt we already had. As well as keeping spending to sensible levels obviously.

Look at the debt to GDP ratios around 2000-2001. Is that not doing what you ask?

 

[Papper]

Most govts spend more than they raise. The trouble is with a surplus is that when a govt does that it is literally taking money out of the economy and doing nothing with it. If we run a £5bn surplus then the private sector will have to fill that hole either via businesses or consumers. If there ever is a case for running a surplus (maybe pay off a little of the national debt) then you do it when things are going great not when we're in the $#@!.

Debts are a real problem for private individuals and companies - for a govt that can literally create it's own money, not so much. Gideon's quantitative easing (or 'printing money' when Corbyn suggests it) saw the BoE buy a huge chunk of our national debt so it's to them that we owe most of it. Given they're directly answerable to the Treasury I don't lose any sleep about them calling it in.

Don't necessarily disagree but if the system relies on creating money out of nothing and meaningless figures where debt is meaningless it becomes a tool of control rather than something that empowers. As it stands the 1% have got the 99% by the short and curlies. We let them get away with it.

 

[Premier Quality]

Look at the debt to GDP ratios around 2000-2001. Is that not doing what you ask?

No - forget debt to gdp, it's an excuse - actual debt should not have gone up in that kind of a boom. As TP says, that's the point to pay off some of the debt to better prepare yourself for the future bust.

 

[The Saturday Boy]

No - forget debt to gdp, it's an excuse - actual debt should not have gone up in that kind of a boom. As TP says, that's the point to pay off some of the debt to better prepare yourself for the future bust.

Isn't that just your opinion though? It wasn't one that was shared by the government of the day, or the many governments before that.

A more constructive debate would be about looking at the benefits of that spending (at the time and the enduring benefits) to see whether it was justified. George Osborne thought it was and was very critical of Gordon Brown when he set out to cut spending in the mid-2000s.

 

[visage]

Debt to GDP is the *only* sensible measure. Its your GDP (i.e income) that mandates how much debt you can easily service.

A country with a trillion dollar GDP can handle considerably more debt than a country with a million dollar GDP.

 

[Premier Quality]

yes of course, pretty much everything on this forum is opinions. economists disagree too and say economics is viewed through a lense of their own opinions, hence why there's not just one view of everything they all agree with.

Happy to look over the productivity benefits of the additional health spending if that helps.

 

[Premier Quality]

Debt to GDP is the *only* sensible measure. Its your GDP (i.e income) that mandates how much debt you can easily service.

A country with a trillion dollar GDP can handle considerably more debt than a country with a million dollar GDP.

Debt to gdp is fine if you eradicate boom to bust and have consistent income. If you can't (which Gordon proved you can't) then you look at the individual elements - spending, income and debt.

 

[visage]

So if its the absolute value of debt that matters, why is Greece in the shitter even though its total debt is around 1/5th of the UK's?

 

[Premier Quality]

How do you not understand this? No, because their debt is too high compared to their income, that's why their debt is unsustainable.

In the same way our debt is also way too high because firstly Gordon fucked it up with his spending lack of a plan, meaning once the boom ended and we entered the bust phase, our income dropped below our spending and the debt continued to rack up and then Osborne hasn't improved the situation since he took over.

 

[visage]

So it's the level of debt to income that matters?

But thats just the debt to GDP ratio, which we should apparently forget, as it's an excuse, according to you.

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[Premier Quality]

Okay, we'll take it slow.

The ratio would be fine if the income never dropped - however it did, and that led to the massive spike in debt. Do you disagree with that?

Income higher than spending =fine
spending higher than income = debt.
Spending as if the boom period will never end = bad economic planning.

 

[visage]

Well if income (GDP) drops then that would be reflected in a higher debt to GDP ratio, correctly indicating a worsening of circumstances.

I think where you're going wrong is to draw a false analogy between the finances of a nation state and the more familar one of a household. Nations can (and do) borrow in perpetuity, thanks to the effect of inflation and economic growth - its how the US governmnet can be 19 trillion dollars in debt with very few ill effects, for example. Secondly, nation states with their own central bank always have the option to act as a lender of last resort to themselves - as this effectively removes the chance of default the rates paid on that interest are very low. Thirdly, if you pay off debt then that has an impact elsewhere. The national debt is an asset to someone else - its a guaranteed income to anyone holding part of it. Pay off that debt and you reduce that income. Its a mathematical truth that the less the government is in debt the more everyone else is - the surplus required to pay off debt is raised by extracting finance from the nation as a whole.

Relying on things that are 'obvious' is where you're going wrong.

 

[visage]

Have a read of this: http://www.theguardian.com/commenti...-government-economic-growth-budgetary-surplus

It describes in laymans terms why relying on things you think are intuitively true doesnt always work.

 

[Premier Quality]

Awesome - the government is very in debt at the moment, so presumably that makes everyone in the country very rich? In that case, Gordon was a genius.

When does my cash turn up please?

Incidentally, we're paying a billion pounds a week in interest payments - is that good too?